Wrap Text
Notice of availability of 2024 annual financial statements
Investec Bank Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1969/004763/06)
LEI No: 549300RH5FFHO48FXT69
JSE Interest rate issuer code: BIINLP
JSE Structured product issuer code: INVP
JSE ETN issuer code: INVSN
CTSE stock code: INV
("Investec" or "the Issuer")
Issue of the Investec Bank Limited Annual Financial Statements
The Annual Financial Statements of Investec Bank Limited for the year ended 31 March 2024 are available for inspection at
the registered office of the Issuer, as well as on the Investec's website at www.investec.com.
The Issuer wishes to advise that the audit report relating to these Annual Financial Statements is unqualified.
Investec advises of the following restatements:
1. Non-sovereign and non-bank cash placements and loans and advances to customers
– Change in classification from non-sovereign and non-bank cash placements to loans and advances to customers
Following a revision of management's internal policies defining the instruments to be included as non-sovereign and non-
bank cash placements and loans and advances, management concluded that R4 428 million (March 2022: R4 718 million)
previously classified in 'non-sovereign and non-bank cash placements' should be disclosed within 'loans and advances to
customers' (based on the revised policies). The change in classification is considered more relevant on the basis that certain
short term facilities to small and medium enterprises are better reflected as loans and advances to customers as it forms part
of the funding strategy of these clients. The comparative balance sheets have been restated for the reclassification. This
change has no impact on the income statements or statements of changes in equity.
– Restatement of non-sovereign and non-bank cash placements in the cash flow statement
'Non-sovereign and non-bank cash placements' amounting to R14 133 million net of ECL of R50 million (March 2022: R13 176
net of ECL R33 million) were previously classified as cash and cash equivalents for the purposes of the cash flow statement.
Management concluded that whilst these balances are available on demand, the nature of these products and the underlying
credit risk more closely aligns with operating cash flow rather than cash and cash equivalents. The comparative cash flow
statement has been restated to more appropriately reflect the nature of these balances. This change has no impact on the
income statements, balance sheets or statements of changes in equity.
2. Restatement of the application of hedge accounting and the correction of the valuation of certain fair value
instruments
It was identified that the application of hedge accounting (cash flow and fair value hedging) applied in prior years, for certain
portfolios within Investec Bank Limited, did not meet the requirements to apply hedge accounting under IAS 39 Financial
Instruments: Recognition and Measurement. It was further identified that certain financial instruments were incorrectly fair
valued.
Accordingly, the related 'cash flow hedge reserve' and 'fair value reserve' totalling R1.4 billion (2022: R1.9 billion) have been
restated retrospectively to 'retained income'. In addition, certain fair value hedge adjustments made in the balance sheet to
hedged items (R523 million (2022: R89 million)) have been reversed to 'retained income' and the valuation of a specific
portfolio of fair value instruments was corrected to 'retained income'. These adjustments resulted in a reduction of taxable
income for certain prior periods to which these matters relate to and resulted in a reduction in 'current taxation liabilities' of
R294 million (2022: R284 million) recognised against 'retained income' for the recovery of those income taxes. The
associated deferred taxation of R529 million (2022: R684 million) previously raised on the cash flow hedge reserve was also
derecognised. All changes were retrospectively restated. These changes have no impact on the cash flow statement.
As a result of not qualifying to apply hedge accounting per above, adjustments previously made to 'interest income' of R587
million have been reclassified to 'trading income/(loss) arising from customer flow'for those portfolios.
This restatement was previously presented in the 30 September 2023 interim results and has subsequently been revised for
purposes of 31 March 2024 reporting to accurately reflect the impact of this matter. As a result, the comparative interim
period in the 30 September 2024 interim financial statements will be restated when they are published.
3. Gross-down of balance sheet lines
– Capital guarantee products
Investec Bank Limited traded a capital guarantee product with clients with Investec Markets Limited. The traded positions
were incorrectly booked on a gross basis to 'loans to Group companies' and 'derivative financial instruments. The capital
guarantee represents a single derivative contract that should be accounted for on a net basis in 'derivative financial
instruments' liabilities. An amount of R852 million (March 2022: R661 million) was accordingly adjusted downwards in 'loans
to Group companies' and 'derivative financial instruments' to reflect a net derivative position. The comparative balance
sheets have been restated. This change has no impact on the income statement, cash flow statement or statement of
changes in equity.
– Gross down of other securitised assets and customer accounts (deposits)
Investec Bank Limited consolidates securitisation vehicles. The cash held by the vehicles was considered by management to
be restricted cash and was separately accounted for in the Group as 'customer accounts (deposits)' with the corresponding
entry in 'other securitised assets'. Following a re-assessment of the current treatment, it was concluded that the accounting
treatment should be revised. Accordingly, an amount of R547 million (March 2022: R592 million) was adjusted downwards on
each line. This change has no impact on the income statements, cash flow statements (other than the consequential impact
on operating assets and operating liabilities, due to the changes in the balance sheet line items) or statements of changes in
equity.
4. Reclassifications
– Reclassification of a reverse repurchase agreement
Investec Bank Limited purchased listed bond positions and entered into a future sale agreement to sell the positions back to
the same counterparty at a fixed price. The bond and the forward purchase were incorrectly accounted for in 'sovereign debt
securities' and 'derivative financial instruments' asset respectively. The two separate positions of R7.9 billion (March 2022:
R7.3 billion) were reclassified to 'reverse repurchase agreements and cash collateral on securities borrowed' to reflect a
collateralised lending transaction. The comparative balance sheets have been restated. This change has no impact on the
income statement, cash flow statement or statement of changes in equity.
– Reclassification of fully funded trading positions
Investec Bank Limited enters into fully funded credit and equity linked trading positions with clients. The positions were
incorrectly accounted for as a derivative as a fully funded position does not meet the definition of a derivative as per IFRS 9
Financial Instruments. R13.9 billion (March 2022: R11.5 billion) was reclassified from 'derivative financial instruments' liabilities
to 'other trading liabilities'. The comparative balance sheets have been restated. This change has no impact on the income
statement, cash flow statement or statement of changes in equity.
5. Fee and commission expense and operating costs
Management identified that R146 million of costs relating to fee and commission income previously reported in operating
costs, would be more appropriately disclosed within fee and commission expense, due to the nature of these costs. As a
result, fee and commission expense and operating costs for the prior periods have been voluntarily restated. The
restatement has no impact on operating profit in the income statement, headline earnings, the cash flow statement and
balance sheet.
6. Reclassifications between interest income, interest expense and trading income/(loss)
The interest consequences of certain financial instrument liabilities were incorrectly accounted for in the interest income line
rather than the interest expense line. This resulted in a reclassification of 'interest income' of R752 million to 'interest
expense'.
Fair value adjustments on certain derivative instruments, not formally designated in a hedge relationship, were accounted for
in either 'interest income' or 'interest expense'. The fair value adjustments of R36 million were reclassified to 'trading income
arising from customer flow'.
In addition, realised cash flows on interest rate swaps (formally designated in a hedge relationship) were incorrectly grossed
up and separately recognised as 'interest income' and 'interest expense'. The two lines were appropriately reduced for the
gross cash flows, and the net movement of R128 million was accounted for in either 'interest income' or 'interest
expense' (depending if it was an asset or liability being hedged).
Interest expense between related parties was incorrectly netted in the 'interest income' and 'interest expense' line items. The
respective lines were increased by R330 million to reflect the correct gross position.
The impact of the above restatements are disclosed in the Annual Financial Statements on Investec's website at
www.investec.com.
By order of the board
N van Wyk
Company Secretary
28 June 2024
For further information
Registered office
100 Grayston Drive
Sandown, Sandton, 2196
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
Company Secretary
N van Wyk
JSE Debt Sponsor and CTSE External Debt Issuer Agent
Investec Bank Limited
Date: 28-06-2024 08:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
